Owner Can’t Require Tenant to Remove Pre-Occupancy Improvements

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August 22, 2013

Q: A warehouse owner made improvements to its commercial property before I moved in. During my lease term, the owner sold the property. Toward the end of the lease term, the new owner asked me to remove the improvements, but I refused. The new owner sued me. The trial court ruled in my favor, without us having to go to trial. The new owner is appealing this ruling. What are the chances that the decision will be reversed?

A: Probably slim, depending on what, if anything, your lease says about removing improvements at the end of the lease term. In a Georgia case similar to yours, the appeals court upheld the trial court’s decision in the tenant’s favor. The court said it was undisputed that the former owner had made the improvements before the tenant took occupancy, and that the tenant was responsible only for returning the property in the same condition as when the tenant moved in. The court also said that the new owner could not require the tenant to remove the improvements, because the lease prohibited the tenant from removing specific improvements. The court also said that the new owner was required to show that no other tenant could make use of these improvements, which it failed to do [Ranwal Properties, LLC v. John H. Harland Co., May 2007].